The Central Bank of the UAE has directed licensed financial institutions in the country to establish alternative complaint mechanisms for consumers who prefer not to rely on decisions made by artificial intelligence systems employed by these institutions.
It emphasized the necessity of having transparent and efficient channels for filing complaints, in line with consumer protection regulations. In a guideline memorandum regarding consumer protection and the responsible use of AI technologies, the bank underscored the right of consumers to contest decisions rendered by AI, including correcting inaccurate data that affects such decisions, and outlined the procedures for contesting data and decisions.
The bank reaffirmed the importance of having clear procedures and policies in place for managing complaints, which should be made available and accessible to customers regularly. Licensed institutions are required to address complaints on a personal level while ensuring efficiency and confidentiality, handling them in the shortest possible timeframe.
In this context, His Excellency Khaled Mohammed Balama, Governor of the Central Bank, stated that the purpose of the guideline memorandum is to establish a clear framework for the responsible use of AI and machine learning technologies within the financial sector, enhancing consumer protection while reinforcing governance and transparency principles, along with emphasizing the importance of human oversight and data protection requirements.
The memorandum also prohibits licensed financial institutions from utilizing AI to target consumers with inappropriate products or to engage in high-pressure sales tactics or misleading marketing. Institutions must ensure that promotional materials and chatbot programs comply with disclosure requirements, aligning with the consumer protection regulation focus on transparency and disclosure.
This guiding memorandum aims to assist large financial institutions in developing and maintaining AI-specific policies and procedures that foster innovation while accommodating market behaviors and consumer protection mechanisms.
The memorandum stresses the importance of transparency from financial institutions towards their clients and relevant stakeholders by clarifying interactions with AI systems across their platforms and electronic channels. It mandates that they explain how AI systems operate and make decisions, providing understandable disclosures in both official languages, ensuring clarity about key decision factors, and offering consumers clear information on the rationale behind AI decisions. Additionally, institutions should provide mechanisms for consumers to inquire or seek remedies, and consider granting customers the right to opt out of AI usage.
Moreover, the memorandum defines the requirements that financial institutions must adhere to when outsourcing AI and machine learning models, products, or solutions from third-party vendors or cloud service providers.
Consideration should be given to the provider’s reputation in the AI field, governance factors, and the implementation of advanced cybersecurity and data protection measures in compliance with central bank regulations.
Personal data collection, storage, and usage must be in accordance with applicable laws and regulations, serving legitimate purposes, while ensuring rapid incident response mechanisms to ensure smooth operations and mitigate risks that could impact consumers due to system failures or potential cyber attacks.
Khaled Balama:
The aim is to establish a clear framework for the responsible use of AI technologies.